FBNC - ConnectOne Smart Financial upgraded First Bancorp downgraded at RayJay

2023-07-31 11:30:12 ET

Raymond James analysts upgraded two banks and downgraded one on Monday after assessing their Q2 earnings and considering their outlooks for coming quarters.

Analyst Daniel Tamayo upgraded ConnectOne Bancorp ( NASDAQ: CNOB ) to Strong Buy from Market Perform and downgraded First Bancorp ( NASDAQ: FBNC ) to Market Perform from Outperform. Analyst Steve Moss upgraded SmartFinancial ( NASDAQ: SMBK ) to Strong Buy from Market Perform.

ConnectOne ( CNOB ) stock climbed 2.7% , and SmartFinancial ( SMBK ) gained 2.5% , and First Bancorp ( FBNC ) fell 3.5% in Monday morning trading.

While ConnectOne ( CNOB ) saw net interest margin compression, higher-than-expected expenses, and modest loan growth in Q2, "core deposits increased, NIM bottomed in April, SBA (Small Business Administration loans) momentum improved, and credit metrics were favorable," Tamayo wrote in a note to clients.

Moss backs his Strong Buy stance on SmartFinancial on the expectation that 2024 earnings improve on NIM expansion as Treasurys matures, and that loan growth continues from increased population in its southeastern territory and M&A disruption.

Flor First Bancorp ( FBNC ), Tamayo said tighter NIM drove a net interest income shortfall, which, combined with higher operating expenses, led to a pretax preprovision income miss. On the positive side, credit metrics were good, fee income rose, and loan growth was solid.

"Though tightened credit standards benefit its credit risk profile, it comes at the expense of a tempered growth outlook, which, along with a tighter NIM, drive our EPS estimates lower," he said.

More on ConnectOne, SmartFinancial, and First Bancorp:

• ConnectOne Bancorp GAAP EPS of $0.51 beats by $0.03
• SmartFinancial GAAP EPS of $0.52 misses by $0.01
• FirstBancorp GAAP EPS of $0.71 misses by $0.03
• ConnectOne Bancorp: Beat Up Preferred Shares Yielding 8.7%
• SA Quant system rates ConnectOne , SmartFinancial , and First Bancorp all as Sells.
• ConnectOne earnings data , SmartFinancial earnings data , and First Bancorp earnings data

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